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Delaware Airpark
Airport Business Plan
Final Technical Report
Prepared for:
Delaware River & Bay Authority
Prepared by:
R.A. Wiedemann &
Associates, Inc.
P.O. Box 621 ! Georgetown, KY 40324 (502) 535-6570 ! FAX (502) 535-5314
Delaware Airpark
Airport Business Plan
August, 2008
Delaware Airpark Airport Business Plan
1.
INTRODUCTION
T
Delaware Airpark is to assess potential means to
improve the Airport=s financial performance, economic development, and operation.
Our understanding of the current situation involves several components, including the
Airport=s competitive setting, the potential private development of hangars, the highest and best
use of Airport property, the benefits and costs of attracting corporate aviation, the Airport’s role
relative to the Civil Air Terminal, air access to Delaware’s capital, and a number of other
facility-related issues.
HE PURPOSE OF THIS BUSINESS PLAN FOR
1.1
Vision Statement
The Airport is owned by the State of Delaware and is leased and operated by the
Delaware River and Bay Authority (DRBA) under a multi-year agreement with the State. The
Airport has adopted the following Vision Statement for its facilities:
ADELDOT and DRBA will strive to meet or exceed citizen needs through accountability,
fairness, consistency and increased communication. We will maintain and improve
existing infrastructure in an effective and efficient manner. New growth will be
accommodated through proactive planning and implementation. We are committed to
supporting a positive work environment in which employees can share in the overall
health, safety and welfare of the community.@
The work on this business plan is an example of proactive planning to ensure that the Airport is
improved in an effective and efficient manner.
1.2
Airport Mission
Delaware Airpark=s role is that of a general aviation facility, providing general aviation
services for regional air transportation. Delaware Airpark accommodates general aviation
activity including all types of propeller aircraft and some small business jets. The Airport is
operated by the Delaware River and Bay Authority (DRBA), and is subject to certain
administrative and legislative controls by the State. There is no specific mission statement for the
Airport, but there is a mission statement for DRBA that we have adapted for the Airport as follows:
“The mission of Delaware Airpark is to provide safe, efficient and modern airport facilities
while participating in controlled economic development opportunities supported by a
technically proficient and professionally motivated workforce dedicated to maintaining
and improving the quality of the community through environmentally and economically
sound infrastructure preservation and growth while providing outstanding service to our
customers.”
The Airport is considered by some as an asset to the community, providing air
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transportation infrastructure needed for both business and personal travel. Airport operational
objectives that support the overall DRBA mission statement could include the following:
Objectives:
 Strive to provide safe, excellent airport facilities and services to its based aircraft owners
and the flying public, while operating compatibly with its neighbors and providing a base
for economic development.
 Work effectively with the State of Delaware in providing and improving facilities and
operations as established within the lease agreement
 Strive to reduce expenditures and increase revenues at the Airport, without sacrificing
needed services.
 Encourage private sector investment in the utilization of the Airport=s facilities.
 Identify and respond to the public's changing needs and priorities regarding DRBA
services.
 Provide the expertise and resources required to promote and participate in the economic
development goals of the city of Dover and Kent County as opportunities arise at the
Airport.
 Encourage compatible public use of Airport facilities or property, (including non-airport
property development adjacent to the airport) where possible and appropriate.
 Promote the individual and group commitment to standards of professional excellence.
The final result is to help the Airport achieve greater financial and operational performance in
support of both DRBA’s and the community=s overall goals and vision.
1.3
Airport Issues
Delaware Airpark currently features one runway: Runway 9-27 is 3,582 feet by 60 feet.
The adopted Airport Master Plan recommends the construction of a new parallel runway, 4,200
feet by 75 feet to be located 425 feet north of the existing Runway 9-27. This action would
upgrade the Airport to acceptable minimums necessary to accommodate a wider range of
business and corporate aircraft - essential to the long term viability of the Airport - while at the
same time improving overall safety of the Airport’s current fleet mix. The business plan
presents an overall strategic direction and plan for the Airport, given its existing setting and
market niche. As such, a number of preliminary issues have been identified including:

Implementation of the Airport Master Plan: The airport master plan calls for the
construction of a new, expanded primary runway north of and parallel to the current
runway, allowing for lengthening from 3,582 feet to 4,200 feet. Much of the property
directly involved in this expansion has already been acquired by the State for DRBA use.
This plan will also require the relocation of existing T-hangars from their current location
north of the existing runway, to a location south of the runway.

Airport Role: The Delaware State Aviation System Plan Update has recommended that
Delaware Airpark serve a supplemental role to the Civil Air Terminal – accommodating
single and multi-engine propeller aircraft. This role is contingent upon the continued
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public use of Dover Air Force Base. The System Plan recommends that contingency
plans be made to ensure that Delaware Airpark can accommodate larger business aircraft
should Dover Air Force Base be restricted in the future to military use only.

DRBA or Private Development of Hangars: There is some question as to the most cost
effective method of developing the Hangars needed at Delaware Airpark. A number of
options will be explored including: DRBA development and construction, contracting
private construction and term ownership, the contracting of private construction as a
turn-key operation retaining full ownership of the facilities for DELDOT, and other
possible variations.

Attraction of Corporate Aviation: The attraction of corporate aviation to Delaware
Airpark is vital to the Airport’s long term viability and will depend in part on several
issues, including the expansion of the primary runway to a length greater than 3,582 feet,
and up-to-date hangar facilities. Without these improvements the Airport is limited in
regard to the types of aircraft it may safely service.

Safety/Noise Around Airport: The new runway will have to be shifted to the west in
order to provide room for the RPZ off Runway End 27. This runway configuration will also
move the expanded RPZ 425 feet to the north, avoiding some residential housing to the
south along State Route 42. This new configuration will shift flight tracks to the north,
avoiding over flight of some housing in Cheswold, thereby resulting in noticeable
improvements in both safety and noise.

Environmental: There are several wetland, forestation, and archaeological site issues that
could be affected by the planned development of Airport property. Areas of impact are
limited to physical impacts of the location of each recommendation including: noise
exposure, wetland areas, necessary tree removal and cultural resources. One of the most
pressing environmental issues will be the permitting and mitigation of wetland areas in the
path of planned Airport development.

Protection of Runway Approaches: A recent Obstruction Study recommended that all
property essential in safeguarding the option of a precision instrument approach
(necessary in attracting corporate aviation) be purchased or otherwise optioned.
Clearly, in light of neighboring development pressures, it would be advantageous do so
as soon as possible in order to hold costs to a minimum.

Corporate Growth and Activity in Dover: Friendly corporate tax laws have made
Delaware a popular center for incorporation activities and banking for businesses across
the United States. Many Fortune 500 and countless smaller corporations have made
Delaware their home. Traditionally, most of this activity has occurred in the northern part
of the State in Wilmington. There is a growing trend of this activity in Dover. As this
movement occurs, there may be a number of steps the Airport can take to partner with the
city and economic development agencies to facilitate the growth and usage of the Airport.
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
1.4
August, 2008
Airport Land Use Compatibility and Zoning: Both State and local regulations and zoning
ordinances apply to the land impacted by Delaware Airpark. The State regulations are
concerned primarily with airport obstructions to navigable airspace, while the Kent County
and Cheswold zoning ordinances apply to land uses and their compatibility with overall
growth and development plans. There has been a move by the City of Cheswold to annex
all the property surrounding the Airport in order to foster residential development and
expand their tax base. Cheswold has proposed an Airport Zoning Ordinance that would
regulate the types of uses around the Airport. The business plan can examine the
language concerning Airport zoning to ensure compatibility with industry standards.
Desired End Products
The end products that are produced as a result of this analysis include the following:






1.5
A well-defined mission statement for the Airport.
An evaluation of current Airport business operating practices.
An identification and evaluation of needs, opportunities, and challenges facing the Airport.
A five-year projection of revenues and expenses at the Airport for the baseline case and
alternative scenarios.
Strategic planning recommendations for the Airport, including those for capital
development, leases, operations, marketing, zoning, and management.
Executive summaries and technical reports for DRBA and DELDOT use.
Report Outline
In order to address the issues described above and to produce the desired end products,
this report has been organized to include the following sections:







Section 1 - Introduction
Section 2 - Background and Management Structure
Section 3 - Existing Airport Characteristics
Section 4 - Baseline Financial and Economic Outlook
Section 5 - Business Plan Alternatives
Section 6 - Recommended Plan
Appendix A – Lease Summaries
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A
Airport Bu
usiness Plan
2.
Augustt, 2008
B
BACKGROU
UND AND MANAGEM
MENT STR
RUCTURE
U
N
NDERSTANDI
ING THE BACK
KGROUND AN
ND MANAGEMENT STRUC
CTURE OF DELAWARE
E
Airpark
h
helps
to iden
ntify challengges and oppoortunities faccing the Airp
rport. Manaagement struucture
i one compo
is
onent of thee Airport=s abbility to reacch its potenttial. As succh, this sectiion is
organizedd to include the followinng:
!
!
2.1
Airpo
ort Managem
ment Structurre
Airpo
ort Staffing
A
Airport
Man
nagement Structure
Delaw
ware Airpark is owned by the Staate of
Delaware andd leased undder a multi-yyear agreemeent by
D
D
DRBA.
The DRBA operates the faacility as a paart of
thheir managgement and operation of five aiirport
f
facilities
locaated in Delaaware and New
N Jersey. The
c
current
form
mal organizzational chaart is show
wn in
F
Figure
1. As
A shown, thhe chain of command moves
m
f
from
the DRB
BA Board of Directors down
d
througgh the
E
Executive
D
Director
of DRBA,
D
throough the DRBA
D
C
Chief
Operaations Officcer, to the DRBA Dirrector
A
Airports,
to the Seniorr Manager of Airportss for
D
DRBA,
to the Airporrt Operations Manageer of
D
Delaware
A
Airpark,
too four paart-time Aiirport
p
personnel
att Delaware Airpark. In additionn, the
D
Deputy
Execcutive Direcctor reports to the Execcutive
D
Director
annd is reesponsible for econnomic
d
development
t and propperty manaagement at the
A
Airport.
Theree are no othher State, Coounty, or Ciity or
d
departments
or comm
mittees invvolved in the
m
management
t and operatiion of the Airport.
A
Theere is
n local Airport
no
A
Booard or otther Aeronnautic
C
Commission
ers charged with reeviewing issues
p
pertaining
too the Airporrt and reporrting back too the
D
DRBA.
Alll managem
ment, financee and persoonnel
issues are maanaged by DRBA.
D
Figure 1 – Organizational
O
Chart
C
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& Associates, In
nc.
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Delaware Airpark
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2.2
August, 2008
Airport Staffing
The day-to-day operation of the Airport is currently the responsibility of the Airport
Operations Manager of Delaware Airpark. The position of Senior Manager of Delaware
Airports incorporates all facets of Airport operations and administration at all three DRBA
managed facilities: New Castle Airport, the Civil Air Terminal at Dover Air Force Base and
Delaware Airpark. The Airport Operations Manager will report directly to the Senior Manager
of Delaware Airports. The Operations Manager must have a working knowledge of Federal,
State, and local laws and regulations relating to aviation. From an administrative standpoint, the
Airport Operations Manager supervises Airport staff, administers Airport security and
emergencies, coordinates all long-range capital development, and coordinates the financial
responsibilities of the Airport with the Finance and Purchasing Departments. The Airport
Operations Manager is also responsible for participating in the planning and environmental
processes at the Airport. Delaware Airpark is staffed by four part-time Airport Security and
Operations Specialists (ASOS) during its working hours.
The Airport is open 24 hours per day, seven days per week. However, it is only staffed
from 8:30 am to 4:30 pm (also seven days a week.). ASOS perform tasks such as the inspection
of the Airport, testing the fuel tanks, daily inventory, cleaning bathrooms if needed, and recording
information in the inspection book. All ASOS also serve with operations at the Civil Air
Terminal at Dover Air Force Base on an as needed basis. The Airport Operations Manager
provides coverage with ASOS during busy times and completes the weekly and monthly reports,
required safety training and meetings per DRBA policy, and insurance requirements. If the
Airport remains open for an average of 8 hours per day, it must be staffed roughly 56 hours per
week. Given that there are often two personnel at the Airport at any one time, about 100 hours of
staffing is needed each week. This translates into 2.5 full time equivalent employees.
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3.
August, 2008
EXISTING AIRPORT CHARACTERISTICS
T
DELAWARE AIRPARK, including
physical infrastructure, operational levels, as well as a profile of existing tenants and users.
This Section also assesses the current market for general aviation services and the
competitive position of Delaware Airpark to service short and long-term demand.
3.1
HIS SECTION IDENTIFIES EXISTING CHARACTERISTICS OF
Airport Location
Delaware Airpark is located
on State Highway 42, approximately
3 miles north of Dover, and situated
about 1 mile west of U.S. Highway
13. Figure 2 shows this location.
3.2
Airport Background
The Airport was originally
developed as a turf field for private
use in the late 1950's. When the
original Dover public-use airport was
converted into Dover Downs, aircraft
owners and pilots at that facility were
displaced. For this reason, the Airport
owner purchased additional property
in 1968, which allowed the
development of hangars and fuel
facilities to better service his growing
clientele. Eventually, the FBO, lounge
and maintenance hangar were also
constructed. In the early 1970's the
runway was again extended to its
present length of 3,582 feet. Runway
lights were added and a beacon was installed to assist night time operations. Hangars were also
developed on the north side of the runway at that time. This location was selected primarily due to
limited traffic and available property.
In August of 2000, the State of Delaware’s Department of Transportation purchased
Delaware Airpark with the agreement and understanding that DRBA would lease and operate the
facility on a long term basis. Numerous factors were involved in the decision to purchase the
Airport, but the most important included the following:
!
Public ownership would guarantee permanent public general aviation
transportation access to central Delaware and most notably the State capital, Dover.
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!
Coordination of the single largest aviation events
in the state, the NASCAR race weekends wherein
air traffic could be better handled via unified
control of both the Civil Air Terminal and
Delaware Airpark.
!
Economic development interests in central
Delaware that desired a first class public use
airport to continue to attract Fortune 500
businesses and investment to the area.
August, 2008
Current Setting
As the largest non-military, publicly owned general aviation airport in central Delaware,
the Airport provides vital air access to the State capital. However, with a current runway of 3,582
feet by 60 feet, operations are limited to small and medium sized propeller and light turbine
powered aircraft. Due to the current length of Runway 9-27, many larger business class general
aviation aircraft must currently utilize the larger runway facilities at the Civil Air Terminal at
Dover Air Force Base, with very explicit restrictions. These restrictions include the requirement
for 72-hour prior permission for all civilian operations.
In many cases, this is simply a logistical consideration for civilian flight planners, but there
are frequent occurrences in which business/political travelers may require access to Dover with
less than three days notice. Other than for reasonable emergencies, the 72-hour prior notice
restriction at the Air Force Base is rarely if ever lifted, presenting a significant hurdle for those
flying on short notice.
In addition to these restrictions, national security events have in the past prompted the Air
Force Base to close to civilian general aviation traffic for periods of up to several months.
Business aviators operating larger aircraft are required to conduct operations at Sussex County
Airport or New Castle Airport, which are approximately 34 miles South and 36 miles north,
respectively. This then adds the inconvenience of a commute via ground transportation into
Dover. While this is a workable situation, it is clearly not an ideal arrangement for many
business/political travelers. These circumstances point towards the need for a permanent civilian
air access point into and out of the Capital.
3.3
Airport Facilities
Airport facilities can be divided into two different categories: airside and landside.
These facilities are important from a business perspective because they dictate the types of
aircraft that can be accommodated at an airport. The larger the aircraft, the higher will be the
expenditures at the airport for fuel, aircraft storage, maintenance, etc. With this in mind, airside
(or airfield) facilities include those directly used by aircraft during takeoff and landing, such as
runways, taxiways, lighting, and instrumentation. Landside facilities include support facilities
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such as buildings and other structures such as aircraft hangars, aircraft parking (tie-down)
aprons, automobile parking lots, and access roads.
Airside Facilities
Delaware Airpark has one asphalt runway (see Figure 3) which was upgraded by DRBA
in a rehabilitation project in 2001. Runway 9-27 is 3,582 feet long and 60 feet wide and
extends in an east-west direction. The runway is in good condition and has non-precision
instrument approach markings, medium intensity runway edge lights, a lighted wind indicator,
and a full length parallel taxiway running along the south side. The taxiway is approximately 20
feet wide along its length with parallel edge lighting and a runway offset of between 95’ to 117’
(which is significantly below the 240’ runway to taxiway separation required by the FAA.) Due
to the current location of hangars on the north side of the runway, there are also multiple
uncontrolled vehicular traffic crosses near the center of the field.
Until recently, the Airport was restricted by a 1,005’ displaced threshold on the western
(Runway 9) end of the runway due to trees exceeding 50’ in height within 260’ of the runway end
and 160’ right of the centerline. In addition, there is a 350’ displaced threshold on the eastern
(Runway 27) end of the runway due to power lines roughly 1,000’ from the runway end. This
meant that the actual operational length of the 3,582’ runway was reduced to 3,232’ for aircraft
landing from the east (Runway 27) end, and to 2,577’ for aircraft landing from the west (Runway
9) end. A recent obstruction removal project eliminated the 1,005’ displacement on the Runway
9 end. The immediate benefit has extended the current operational length of the runway to 3,582’
for those landing from the western (Runway 9) end, thereby increasing the size of aircraft that
could safely use the Airport from that direction.
The runway function has been significantly improved by the elimination of the 1,005’
displaced threshold on the Runway 9 end. However, there is little doubt that the limitation
imposed by the displaced threshold over the past several years has limited the fleet mix of based
aircraft at the Airport to smaller aircraft types. It may be assumed that over time, larger corporate
aircraft will eventually find their way to the Airport; however, some effort is required if this
timeline is to be accelerated. One way in which to accomplish this is through the development of
hangars. At the time of this writing (July 2008), there are 32 aircraft on a T-hangar waiting list.
Table 1 summarizes the runway data Delaware Airpark. The Airport is further equipped
with a white-green (lighted land airport) rotating beacon, and a lighted wind indicator.
Table 1 - Runway Data Summary
ITEM
Runway 9-27
9
27
Length
3,582
Width
60
Pavement
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Table 1 - Runway Data Summary
ITEM
Weight Bearing Capacity
Markings
Runway 9-27
12,500 SW / 18,000 DW
NPI in Good Condition
Runway End Identifier Lights
Pavement Edge Lighting
Yes
Medium Intensity (MIRL)
Visual Aid
None
Displaced Threshold
None
350'
Traffic Pattern
Left
Left
RNAV
RNAV
Approaches
In preparation for the development of the new parallel runway and required Runway
Protection Zones (as described in the current Airport Master Plan) DelDOT is in the process of
acquiring approximately 150 acres of additional land in 16 parcels adjacent to the Airport.
There are two non-precision approaches available at Delaware Airpark. Each runway end
is equipped with a straight-in RNAV or GPS approach which uses satellite navigation. These
instrument approaches increase the utility of the Airport by providing navigational guidance when
weather visibility conditions are poor. An RNAV or basic GPS approach provides horizontal
guidance while a precision approach provides both horizontal and vertical flight path guidance.
Many business jet airports are being equipped with precision instrument approaches generated by
GPS technology in order to better operate during all types of weather conditions.
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Landside Facilities
Delaware Airpark=s landside facilities include a new administration/terminal building with
an attached maintenance hangar, a fuel storage tank containing 100LL with a self-serve card reader
pump, 20 aircraft storage hangars, 24 paved and 12 grass aircraft tie-downs.
Descriptions of the existing hangars include the following:

T-Hangar (6 units) - (190'x30', 5,700 SF), Condition: Fair. This hangar is a steel frame
structure with a steel roof truss, corrugated metal walls, doors, and roof. The
single-nested hangar provides manual sliding doors. The building is used solely for
private aircraft storage and contains power for lighting, but no other utilities. The taxilane
on the east side is in fair condition, and the taxilane on the west side is in fair to poor
condition with some cracking. This hangar penetrates the existing Part 77 primary surface
and object free area (OFA) of the runway.

Open Bay Hangar (1 Unit) - (44'x44', 1,900 SF), Condition: Fair. This hangar is a wood
frame and truss building, covered with corrugated metal. Access is provided by a single
door on the south face of the hangar. The hangar has a relatively new roof and door and is
in fair condition. This hangar penetrates the primary surface described in FAR Part 77.

T-Hangar (12 units) - (290'x50', 14,500 SF), Condition: Fair to Poor. This double-nested
hangar is a wood frame and truss structure covered with corrugated steel and equipped with
rolling/overhead doors. The building is used solely for private aircraft storage. The
taxilane on the south side is in fair condition; the taxilane on the north side is in poor
condition. This hangar penetrates the primary surface described in FAR Part 77.
All of the hangar spaces are located on the north side of the runway. One drawback
associated with this location has been that aircraft owners must drive their vehicles across the
active runway to access these hangars. All must be relocated or demolished to accommodate the
new 4,200’ parallel runway.
The 12 units in building “B” and the conventional hangar were constructed around 1980,
and may have some serviceable life remaining. The design and proportions of the buildings
however, do not fit the planned development of new T-hangars on the south side of the runway. It
is recommended that this building be sold for scrap value.
The apron area located on the terminal side of the runway consists of the itinerant ramp and
tie-down area. This apron was recently repaved by DRBA and is in excellent condition. The
itinerant ramp, including taxilane measures 115 feet by 540 feet. The tie-down area measures
roughly 90 feet by 200 feet. Total paved apron area is approximately 9,000 square yards. In
addition to the paved apron, there is a turf tie-down area of roughly 3,000 square yards located to
the west of the terminal area.
There are three off-airport hangars, whose owners operate “through-the-fence.” This
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means that the owners have access to the runway, even though their hangars are located off airport
property. The first hangar is a privately owned facility, 80 feet by 50 feet, in excellent condition.
It has a concrete pad, for the hangar and asphalt for the hangar apron. The second facility is
owned by Towery Aircraft and is in good condition. It consists of a 50 foot by 80 foot hangar
with a 20 foot by 40 foot “lean-to” office attached to the side of the building. The business
specializes in the repair and maintenance of Beechcraft aircraft. The third hangar is the home of
Russell Aircraft Refinishing - a paint shop specializing in aircraft painting and refinishing. The
hangar is 50 feet by 50 feet and is in poor condition. Only one of these operators has an existing
lease agreement with the Airport for continued use.
3.4
Aviation Demand Forecasts
Airport aviation activity at Delaware Airpark is made up primarily of general aviation
traffic with occasional military training. General aviation is defined as all flying except airlines
and the military. In this regard, general aviation activity at Delaware Airpark refers to pilot
training, air taxi operations, crop spraying, some corporate aviation, and tourism. One major
factor in the activity levels at Delaware Airpark involves Delaware State University’s flight
training program for students. This program has increased the Airport’s level of operations
significantly over the past decade. The flight program continues to grow despite some funding
cuts from federal sources.
The level of aviation activity at the airport is gauged primarily on the basis of two
measures: based aircraft and operations. A based aircraft is an aircraft permanently based at an
airport by its owner. An aircraft operation, on the other hand, is either a takeoff or a landing. A
takeoff and landing add up to two operations. At Delaware Airpark, there are currently 46 based
aircraft with 2 multi-engine aircraft, 43 single engine aircraft and 1 helicopter. The annual
number of operations has been estimated at roughly 36,000.
Table 2 presents the forecast of based aircraft fleet mix for Delaware Airpark (taken from
the Delaware Aviation System Plan Update), and includes single engine, multi-engine, turbojet,
rotorcraft, and "other" aircraft.
Table 2 - Forecast of Based Aircraft Fleet Mix
Airport
SingleEngine
MultiEngine
Jet
Rotor
Other
Total
2005
42
2
0
0
0
44
2010
44
3
0
0
1
48
2015
45
3
1
0
2
51
2025
45
4
3
1
4
57
Table 3 presents the forecast of aircraft operations for Delaware Airpark, also from the Statewide
Aviation System Plan Update.
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Table 3 - Forecast of Aircraft Operations
Local
Itinerant
Total
2005
30,000
6,000
36,000
2010
32,700
6,500
39,200
2015
34,700
6,900
41,600
2025
38,700
7,700
46,400
The future growth of activity at Delaware Airpark is dependent on a range of factors,
including general economic health, local business activity such as investment and growth, and also
development of airside and landside facilities at other nearby airports. The effects of other local
airports on Delaware Airpark will be further discussed in the Market Analysis (Section 3.5).
3.5
Market Analysis
To understand the revenue-producing potential of Delaware Airpark, it is important to
evaluate the economic forces at play in the existing market. The interaction of customers in the
market with existing offerings of aviation products and services determines prices, and can guide
the Airport in finding a unique position in the market that can produce revenue. In addition to
assessing the condition of the existing market in the Central Delaware region, there is also some
undetermined amount of non-customers that may be converted to customers, should the Airport
find the right balance of product/service, price, and value to offer the market. The ultimate goal
of the Airport is to capture an increased share of both the existing customer market and a share of
the natural regional growth of general aviation demand in the Central Delaware market.
Airport Market Area
Delaware Airpark serves general aviation users in Kent and southern New Castle counties.
This service area overlaps the service areas of other existing public-use airports in the area and
primarily includes the cities of Dover and Smyrna, with extended coverage to other smaller
communities in central Delaware and eastern Maryland. Figure 4 illustrates the general market
area of the Airport and includes nine other nearby public-use airports.
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Market Area Airport Facilities
Within the geographic reach of Delaware Airpark, there are a number of other public-use
airports, which provide a range of general aviation services. These airports may compete with
Delaware Airpark for activity and users. For this Business Plan, the airports considered as
potential competitors include:
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Cecil County (58M)
Chandelle Estates (0N4)
Chorman (D74)
Easton (ESN)
New Castle (ILG)
Ridgely Airpark (RJD)
Spitfire Aerodrome (7N7)
Summit (EVY)
Sussex County (GED)
These airports and the facilities and services they offer represent alternative markets for general
aviation products and services in the Central Delaware region. Table 4 presents information
regarding the facilities offered by these airports for comparison purposes.
As indicated, airports within Delaware Airpark’s market area offer a range of options to
general aviation users. The largest airfield in the area is New Castle Airport, which consists of
1,250 acres, and has the longest runway (7,012 feet). New Castle Airport also has the most number
of based aircraft at 282 with 66 of those being jet aircraft. Sussex County offers the second longest
runway of all ten airports at (5,000') and has a total of 47 based aircraft. Spitfire Aerodrome offers
the smallest runway at 2,419’ and Chorman Airport has the least number of based aircraft at (19).
Delaware Airpark’s facilities are average for the region. In terms of airfield size,
Delaware Airpark is the fifth largest of the ten airports, and has the fifth most based aircraft.
Delaware Airpark’s operations are limited to small and medium sized propeller and light turbine
powered aircraft. Business aviators operating larger aircraft wishing to gain access to the capital
have to conduct their operations at the Civil Air Terminal at Dover Air Force Base or they must use
Sussex County Airport approximately 34 miles to the South, or New Castle Airport approximately
36 miles to the north, and then commute via ground transportation into Dover.
Market Area General Aviation Services
General aviation services available at area airports include airframe repairs, powerplant
repairs, flight instruction, charter services, avionics and aircraft sales and rentals are shown in
Table 5. Delaware Airpark is the only airport that doesn’t offer airframe or powerplant repairs
in the service area. They do offer flight instruction and aircraft rentals. They also have three
through the fence operations that offer aircraft panting refinishing as well limited repairs and
maintenance.
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Delaware Airpark
Airport Business Plan
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Market Area Rates and Charges
To determine the market area rates and charges, a telephone survey of tie-down fees and
hangar prices was conducted to see what other airports were charging in the service area. DRBA
can use this assessment to determine if it is financially feasible to construct the new hangars by
estimating how much could be charged monthly for the new T-hangars and still stay competitive.
In terms of aircraft storage, rates for monthly tie-down fees began at $40 at Delaware
Airpark for a turf tie-down. The highest amount reported for a tie-down fee was at Summit Airport
at $80 a month for a paved tie-down space. All of the Airports surveyed had tie-down spaces
available. Hangar storage at these regional airports varies, depending mostly on type
(box/conventional or T-hangar). Rates begin as low as $150 per month for a T-hangar at Delaware
Airpark, to a high of $460 per month at Cecil County Airport. For conventional hangars the
lowest monthly fee is at Summit Airport for $250 per month and the highest monthly fee is $5,000
at New Castle Airport. On a square foot basis, T-hangar storage ranges from a rate of $1.50 to
$6.00 per square foot per year. Box or conventional hangar storage can be leased for $6.00 per
square foot per year.
None of the ten airports surveyed had hangar space available and the average cost to rent a
T-hangar was $260 per month. Most of the airports had waiting lists, one airport;
Easton/Newnam Field, has a five year waiting list for a T-hangar. The reason that there is a
shortage of hangars in the State is the fact that in order to charge the average market rate of $260 a
month for a T-hangar, the price to build a one unit T-hangar over a 25 year period at 5 percent
without a profit would have to be around $45,000.
Delaware Airpark charged the lowest rates for T-hangars in the region. The average
T-hangar price for airports in the region was $260 per month, while Delaware Airpark charged
$150 - $180 per month. Delaware Airpark was also at the lower end for selling 100LL fuel. The
lowest price in the service area was $4.58 at Ridgely Airpark while the highest price was $5.70
at New Castle Airport. The average fuel price for 100LL in the region was $5.11 while
Delaware Airpark charged $4.86.
Summary of Market Area Analysis
From a rates and charges standpoint, Delaware Airpark employs a pricing strategy that
places it at the lower end of the airport facilities discussed here. In terms of fuel prices,
Delaware Airpark charges $0.25 lower than the average for 100LL (May 2008). When operators
consider fuel for their aircraft in the Delaware Region they will be able to access only two other
airports with lower 100LL prices. Delaware Airpark also charges between $150-$180 per
T-hangar while the average price for a T-hangar in the service area is $260.
From a facilities and service comparison Delaware Airpark is at a disadvantage when it
comes to airframe and powerplant repairs because it is the only airport in the service area that
does not offer these services. Delaware Airpark does offer flight instruction, aircraft sales and
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rentals as well as crop dusting. Although users may not come to Delaware Airpark for their
repair services, they will be inclined to visit the airport for the low rates of fuel and low hangar
rates that Delaware Airpark has to offer.
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Table 4 - Facility Comparison
Airport
Airport Ownership Acres
Code
Number of Based Aircraft
Runway
Jet Multi- Single Heli- Other Total
Cecil CO
58M
Private
22
Chandelle Estates
0N4
Private
27
Chorman
D74
Private
134
Delaware Airpark
33N
Public
65
Easton/Newnam field
ESN
Public
500
New Castle
ILG
Public
1,250
Ridgely Airpark
RJD
Private
76
Spitfire Aerodrome
7N7
Private
48
Summit
EVY
Private
209
Sussex County
GED
Public
615
TOTAL
−
Navaids
First
LxW
Second
LxW
Highest
Tower
4
46
-
3
53
2,987 X 70'
N/A
GPS/VOR
No
2
22
-
-
24
2,533 X 28'
N/A
Visual
No
2
17
-
-
19
3,588X 38'
N/A
Visual
No
2
43
1
-
46
3,582' X 60'
N/A
GPS/VOR
No
25
122
8
-
170
4,003 X 100'
N/A
GPS/ILS
Yes
24
167
16
9
282
7,181' X 150'
7,012’X150’
GPS/ILS
Yes
1
21
-
10
32
3,214' X 50'
N/A
GPS
No
1
38
4
-
43
2,419' X 60'
N/A
GPS
No
−
6
63
7
-
76
4,487' X 65'
3,000' X 200' T
VOR/GPS
No
5
35
2
1
47
5,000’ X 150’
2,330’ X 50’
VOR/GPS
No
87
80
631
38
23
859
−
−
−
15
66
−
−
4
Source: Airport Master Record as Published 25 July 2008 (www.airnav.com).
Runways:
Paved unless: T = turf,
*Other: Ultalite, Glider, or Military
19
Table 5 - Service Comparison
Airport
Airframe
Repairs
Powerplant
Repairs
Flight
Instruction
Charter
Service
Avionics
Aircraft
Sales
Aircraft
Rentals
Cecil CO
Major
Major
Yes
No
No
No
Yes
Chandelle Estates
Major
Major
Yes
No
No
Yes
Yes
Chorman
Major
Major
No
No
No
No
No
Extensive aerial spray operation.
Delaware Airpark
None
None
Yes
No
No
Yes
Yes
Crop Dusting
Easton/Newnam field
Major
Major
Yes
Yes
Yes
Yes
Yes
New Castle
Major
Major
Yes
Yes
Yes
Yes
Yes
Air Ambulance, Cargo
Ridgely Airpark
Major
Major
Yes
No
No
No
Yes
Glider and tow operation
Spitfire Aerodrome
Major
Major
Yes
No
No
No
Yes
Surveying
Summit
Major
Major
Yes
No
Yes
No
No
Airframe modification
Major
Major
Yes
Yes
Source: Airport Master Record as Published 25 July 2008 (www.airnav.com)
No
Yes
Yes
Air Ambulance
Sussex County
Other
20
Table 6 - Rates and Charges Comparison
Airport
Tie-Down
Conventional Hangars
T-Hangars
Lowest Fuel Price ($/gallon)
Landing
Fee
$/month
Available
$/month
Available
$/ month
Available
100 ll
Jet A
65
Yes
275-1,250
No
415-460
No
4.75
4.95
No
Delaware Airpark
40T 60P
Yes
N/A
N/A
150-180
No
4.86
N/A
No
Easton/Newnam
Field
65
Yes
N/A
N/A
5yr waiting
list
No
5.22
5.23
No
New Castle
75
Yes
5,000
No
225-300
No
5.70
6.18
Yes
50T
Yes
N/A
N/A
165
No
4.58
3.99
50
Yes
N/A
N/A
200
No
5.45
5.45
No
Summit
45T 80P
Yes
250
No
225
No
4.95
5.00
No
Sussex County
45T 50P
Yes
N/A
N/A
360
N/A
5.41
5.52
No
Cecil CO
Ridgely Airpark
Spitfire Aerodrome
Source:
Source:
N/A
T- Turf
RA Wiedemann & Associates Inc. Telephone Survey 5-20-08
Airport Master Record as Published 20 May 2008 (www.airnav.com)
Not Available
P- Pavement
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Airport Business Plan
4
August, 2008
BASELINE FINANCIAL OUTLOOK
HIS SECTION IDENTIFIES HISTORICAL REVENUES AND EXPENSES attributable to Delaware
Airpark and projects those revenues and expenses to the year 2013. This projection only
considers a baseline scenario with no revenue enhancement projects included. In other words,
what are the financial implications of continuing the Airport’s operation as it is today? In a later
section alternative projections of financial performance will be developed based upon master plan
improvements and marketing pro-formas. To properly frame these financial statements, this section
is organized to present the following:
T
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4.1
Historical Revenues and Expenses
Baseline Forecast of Revenues and Expenses
Historical Revenues and Expenses
Information concerning historical revenues and expenses were taken from the year 2005
through 2007. This data gave an indication of the direction of growth of the revenue base. Table
7 shows the historical revenues and expenses taken from Delaware Airpark’s financial records.
Table 7 - Historical Revenues and Expenses
Operating revenue:
2005
2006
2007
Lease Revenues
$63,346
$55,864
$57,169
Fuel
$93,388
$121,928
$129,339
($563)
($248)
($866)
$156,171
$177,544
$185,642
2005
2006
2007
$113,900
$128,602
$104,579
Operations
$0
$16,853
$52,766
Fuel Costs
$89,798
$97,123
$107,329
$4,820
$5,782
$2,423
Administration Allocation
$56,202
$44,962
$37,777
Total operating expenses
$264,720
$293,322
$304,874
($108,549)
($115,778)
($119,232)
Other income
Total operating revenues
Operating expenses:
Maintenance
Benefits
Total Net Revenues
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As shown, the revenue and expense statement does not include non-operating revenues and
expenses or grant reimbursements. For purposes of the business plan, the ability of the Airport to
generate revenues and cover operating costs is the primary concern. From the historical information,
Operating expenses have grown by roughly 7 percent per year over the three year history. Operating
income has grown by 9 percent, and net revenue expense has increased by 4.8 percent per year. It
is against this historical that the baseline forecast of revenues for Delaware Airpark are presented.
It should be noted that most public-use general aviation airports in the United States do not cover
expenses with revenues and must be subsidized by their owners/sponsors.
4.2
Baseline Forecast of Revenues and Expenses
This baseline forecast presents a status quo look at revenues and expenses, influenced
primary by historical activity. It does not consider all of the potential changes at the Airport that
might occur through the implementation of the master plan or in the Kent County economy that
might change the historical trend. To determine the historical trend, the percent increase from the
year 2005 to the year 2007 was examined to find the average percent change in revenues and
expenses. Thus, any major fluctuation during any one year did not unduly affect the overall trend.
Over the three year period the following notable trends were identified:
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Unleaded fuel sales revenue increased by an average of 31 percent from 2005 to
2006, but increased by only 6 percent from 2006 to 2007.
Fuel costs increased by 9 percent per year over the 2005-2007 period.
Total net expenses increased by 5 percent per year.
To keep baseline forecasts conservative, several assumptions were made concerning the
growth of revenues and expenses. In this regard, aviation fuel costs were assumed to increase in
price by 8 percent per year. The fuel margin was expected to stay at 15 percent (roughly 60 cents
per gallon for a $4 retail price). The three year averages were calculated for Maintenance, Benefits,
and Administration Allocation and then were increased at the rate of the CPI (estimated at 4 percent
per year). Operations expense was also increased by the rate of the CPI. Other income and landing
fees were assumed to be zero through 2013. Lease Revenues were assumed to increase with the CPI
through the year 2013 (Table 8).
Table 8 - Baseline Forecast of Operating Revenues and Expenses
ITEM
2008
2009
2010
2011
2012
2013
$58,793
$61,145
$63,591
$66,134
$68,779
$71,531
Fuel
$133,303
$143,967
$155,484
$167,923
$181,357
$195,865
Total Operating Revenues
$192,096
$205,112
$219,075
$234,057
$250,136
$267,396
REVENUES
Lease Revenues
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Table 8 - Baseline Forecast of Operating Revenues and Expenses
ITEM
2008
2009
2010
2011
2012
2013
$120,321
$125,134
$130,140
$135,345
$140,759
$146,389
Operations
$54,877
$57,072
$59,355
$61,729
$64,198
$66,766
Fuel Costs
$115,915
$125,189
$135,204
$146,020
$157,702
$170,318
$4,515
$4,696
$4,884
$5,079
$5,282
$5,494
$48,166
$50,093
$52,097
$54,180
$56,348
$58,602
EXPENSES
Maintenance
Benefits
Administration Allocation
Total Operating Expenses
$343,794
$362,184
$381,680
$402,353
$424,289
$447,569
Net Revenues/ (Deficit)
($151,698)
($157,072)
($162,605)
($168,296)
($174,153)
($180,173)
As shown, baseline revenues are anticipated to grow from $192,096 in 2008 to $267,396 by the
year 2013 - a 39 percent increase. Baseline operating expenses are expected to increase from $343,794
in 2008 to $447,569 by the year 2013 - a 30 percent increase. These increases can be attributed mostly
to the 46.9 percent increase of fuel costs over the period.
When the baseline operational costs are compared with the baseline forecasts of operational
revenues, the net operating costs for the Airport can be predicted as follows (Table 9):
Table 9 - Baseline Net Operating Income/(Deficit)
Year
Operating Expense
Operating Revenues
Net Operating Income/(Deficit)
2008
$192,100
$343,800
($151,700)
2009
$205,200
$362,200
($157,000)
2010
$219,100
$381,700
($162,600)
2011
2012
$234,100
$402,400
($168,300)
$250,100
$267,400
$424,300
$447,600
($174,200)
($180,200)
2013
As shown, the net operating deficit is anticipated to grow from $151,700 in 2008 to $180,200
by the year 2013 - a 3.5 percent per year increase. Hence, the results of the baseline forecast indicate
that if no additional revenue generating measures are taken, DRBA will have to cover this shortfall in
operating revenues.
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5.
August, 2008
BUSINESS PLAN ALTERNATIVES
G
under the status quo scenario, several
business plan alternatives were developed to explore a variety of methods designed to
increase net revenues. These revenues could be used to pay operating costs and possibly
portions of the local share of capital development projects. The goal is to ultimately help reduce
the dependence upon DRBA subsidies. In order to present these alternatives, this section is
organized to include the following:
•
•
•
•
5.1
IVEN THE FORECAST OF NEGATIVE NET REVENUES
Area-wide factors supporting growth and development of the Airport
Obstacles to Airport performance and goal attainment
Revenue enhancement
Cost efficiency/Management structure options
Area-wide Factors Supporting Growth and Development of the Airport
Delaware Airpark is home to 46 based aircraft, Delaware State University’s flight
training program, and three through the fence operations. Delaware Airpark serves both
corporate and recreational flyers year-round. During race weekends, many race teams, drivers,
and sponsors use Delaware Airpark because of its close proximity to the Monster Mile racetrack
at Dover Downs. There are a number of factors described below that support the potential
growth and development of Delaware Airpark.
Airport Size and Location
Delaware Airpark is located less than a 10 minute drive from Dover, the capital of
Delaware. As the only non-military, publicly owned general aviation airport in Central
Delaware, the Airport provides vital air access to the state capital. With a current runway of
3,582-foot by 60-foot, operations are limited to small and medium sized propeller and light
turbine powered aircraft. However, the planned development of a new 4,200-foot by 75-foot
runway will expand the fleet mix accessibility to the Airport. As such, the planned size and
location of the Airport supports the growth in activity at Delaware Airpark.
Business
Increasingly, corporate and business aviation is supporting the financial solvency of
general aviation airports. Therefore, the growth of business and industry in central Delaware
impacts the demand for aviation facilities and services. Some well-known companies such as
Playtex Products, Playtex Apparel, Kraft Foods, Scott Paper, Citicorp Insurance Group, Bank of
America, Aetna Insurance, PPG Industries, Discover Card (Greenwood Trust), ILC Dover, Eagle
Group, Inc., General Metalcraft, Dentsply International, and Perdue Farms provide for a welldiversified employment base. Many of these companies have corporate aviation departments,
creating a demand for aviation facilities in the area. By way of background, some of the major
employers in the area include:
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Employer
Type
Employees
Dover Air Force Base
Military
8,595
Bayhealth Medical Center
Hospital
2,445
Dover Downs
Gambling/Harness Racing
1,200
Playtex
Personal Care
1,105
Kraft Foods
Food Products
Delaware State University
Education
Client Logic
Catalog Fulfillment
760
Client Logic
Catalog Fulfillment
760
Bank of America Credit Card
Services
615
Aetna U.S. Healthcare
Insurance
525
ILC Dover, Inc.
Protective Clothing
420
Delaware Tech College
Education
400
Walmart
Retail
380
Procter & Gamble
Paper Products
350
Wesley College
Education
350
Boscov's Department Store
Retail
250
Discover Card Credit
Card Services
230
815
650 FT /500 PT
Sam's Club
Retail
190
Reichold, Inc.
Chemicals
187
Source: Central Delaware Economic Development Council July 18,2008
Delaware is renowned for its pro-business climate, often referred to as the "corporate
capital of the world," as more than 60 percent of Fortune 500 companies are incorporated in
Delaware. Delaware’s national rankings in various business activity measures confirm its
desirability as a business hub. For example, Delaware ranks number one in industry research
and development,1 number one in the best legal environment for business,2 and number one in
the best job opportunities, job quality, and workplace fairness.3
Industrial Parks:
Central Delaware is fortunate to have 10 industrial parks and a Foreign Trade Zone
(FTZ). These include:
●
●
●
Blue Hen Corporate Office Park
Creekside Center
Enterprise Business Park
●
●
●
Central Delaware Industrial Park
Eden Hill Farm
Former Sara Lee Building
1
Source: 2007 State New Economy Index, Kauffman Foundation/Information Technology &
Innovation Foundation.
2
Source: U.S. Chamber of Commerce
3
Source: Political Economy Research Institute, University of Massachusetts Amherst
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●
●
●
Garrison Oaks
McKee Business Park
Wyoming Foreign Trade Zone
August, 2008
●
●
Kent County Aeropark
West Side Development Project
These concentrated hubs for business and industry generate demand centers for aviation
transportation. As business and economic activity increase, so does the need for air travel.
Delaware Tax Structure
Another feature that makes Delaware attractive to corporations and other businesses is
the tax structure. Delaware has reduced its personal income taxes at all income levels. The State
has never had a general sales tax or an inventory tax. There are no State real property taxes, and
the local real property taxes are very low. The total State and local tax burden in Delaware is
competitive with most other states. Key tax features available to businesses in Delaware include:
●
●
●
●
●
●
●
●
A Constitutional requirement that any increase in existing State taxes, or new
State taxes, is adopted by a super-majority (3/5) vote in the State Legislature.
No State or local general sales tax.
An improved structure for unemployment insurance taxation that includes
accelerated experience ratings for new employers.
Tax credits on bank franchise, corporate income and reduction of gross receipts
taxes for new and expanded businesses.
Additional tax credits on corporate income and reduction of gross receipt taxes for
new and expanding businesses locating in 30 targeted census tracts.
Property tax relief for new construction and improvements of existing property.
The adherence of the State tax structure to the federal definition of corporate net
income so that companies may take full advantage of any federal tax law change,
such as more rapid depreciation of newly purchased assets.
Public Utility Tax rebates of 50 percent on increased consumption for qualifying
industries, and a reduced rate for manufacturers and agricultural processors.
Other Business Incentives
There are a number of State and local business incentives to help new businesses in Kent
County. These incentives include but are not limited to:
●
Delaware Economic Development Office: Provides assistance to businesses in
obtaining financing, with workers’ training programs, by solving problems with
procedures and with expert assistance.
Delaware Competitiveness Fund: For manufacturers to make capital
investments to preserve and expand productivity, competitiveness and jobs
at existing Delaware plant sites.
Delaware Strategic Fund: DEDO’s primary funding source to provide
customized financial assistance in the form of low interest loans, grants, or
other creative instruments.
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Citizens Bank of Delaware's Matching Loan Partnership Program: A
first-of-its-kind, low-interest business loan program.
Tax-Exempt Bond Financing: Financing through the issuance of taxexempt bonds available to certain entities exempt from federal income
taxation.
Emerging Technology Funds: For tech-based entrepreneurs seeking debt
or equity funding.
The Delaware Access Program: Encourages Delaware banks to make
loans they would otherwise not make due to a borrowers riskier profile.
The Clean Energy Partnership: A grant program that supports work and
research at the University of Delaware and Delaware State University to
build a nationally recognized Clean Energy Center
●
Delaware Manufacturing Extension Partnership (DEMEP): Delaware’s best
resource for manufacturing support and expertise. DEMEP helps manufacturers
be globally competitive by: assessing needs and opportunities, identifying
appropriate resources and creating and managing successful partnerships to
improve quality, productivity and profitability.
●
Delaware Department of Labor: Prescreens applicants for staffing needs. Links
employers and job seekers.
●
Central Delaware Economic Development Council: Provides assistance in
small-business startups, site selection, demographics, financing opportunities,
education and training programs.
SBA Section 504 Program: The 504 Program offers long-term fixed
assets financing at fixed rates for projects in the $120,000 to $2,500,000
range. The 504 Program involves a private sector lender and the Delaware
Development Authority. A typical project would involve 50% funding
from a private lender, 40% from the Delaware Development Corporation
and 10% from the business.
Small Business Administration Assistance: Financing is available for
business start-ups and expansions assets. The SBA may require 15-20%
equity from starting companies. The SBA generally guarantees 90% of the
loan from a local lender with a maximum of $750.000. Guaranteed loans
are used by firms whose loan needs exceed the usual banking criteria. The
terms usually exceed those available from a bank.
SBA Resource Center/SCORE Assistance: The Central Delaware
Chamber of Commerce is an officially designated SBA Resource Center.
Delaware Small Business Development Center: Through one on one
counseling the Delaware Small Business Development Center can assist
entrepreneurs in starting a business or help an existing business solve
problems.
Tax Incentives for Targeted Industries: Kent County has a 10 year property tax
incentive program in addition to statewide Corporate Income Tax credits and Gross
Receipts Tax reductions.
-
●
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5.2
August, 2008
Obstacles to Airport Performance
In addition to the positive trends, there are factors that present challenges to the
attainment of stated goals and objectives for the financial performance of the Airport. Some of
these potential obstacles include:
•
Soaring Fuel Prices: AOPA reports that fuel sales in the first quarter of 2008 were down
18 percent from 2007. This indicates a contraction of overall general aviation activity,
especially in regard to recreational flying. This increases the need to attract more business
aviation activity to the Airport.
•
Lack of Adequate Hangar Space: The Airport currently has 19 T-hangars and one
conventional box hangar at full occupancy. There is a waiting list of over 30 of aircraft
owners seeking hangar space when it becomes available. There is presently nowhere to
house corporate operators should they wish to locate on the airport.
•
Cost of Hangar Development: In recent years, the cost of T-hangar and Conventional
hangar development has risen dramatically. This rise has outpaced the prevailing rents
that are paid by based aircraft owners that rent hangar space. As a result, the revenue
base needed to support new hangar development is significantly limited. This
complicates the problem of a lack of adequate hangar space and makes the use of low
cost hangar development essential to the feasibility of adding additional aircraft storage
space.
•
Inadequate Runway Length: The current Runway at 3,582’ is too short to adequately
handle many medium to large turbine powered business class aircraft. Added to this
inadequacy was the longstanding restriction imposed by the 1,005’ displaced threshold on
Runway 9. Although now removed, the displaced threshold and limited runway length
have correspondingly restricted the fleet mix at the airport in the past to primarily small
single engine aircraft. The Airport Master Plan recommends a new 4,200’ Runway which
will accommodate projected regional business aviation growth. Unfortunately, the new
runway may be three to five years away due to funding and environmental hurdles.
•
Lack of an FBO with Major Services: Another limiting factor in regard to attracting and
retaining corporate and business aviation on the airport is the lack of an FBO providing
airframe and power plant services. It is entirely possible to arrange such services on an
“on call” basis, but appropriate hangar facilities are needed in which to work on aircraft.
•
Availability of Jet A Fuel: Currently the Airport is limited to offering 100LL Avgas via a
carded self serve tank on the west end of the main ramp area. Delivery of Jet A fuel can
be arranged with prior notice, but if corporate aviation is to be attracted, Jet A fuel must
be made available on a permanent basis. A new fuel farm with duel aviation fuel
capability (Jet A and 100 LL) is under development. Until it is constructed and on line,
the Airport will be limited as to the types of aircraft it may serve.
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•
Lack of All Weather Precision Approach: The Airport currently has non-precision
instrument approaches which provide limited guidance information (horizontal but not
vertical). Business and corporate aviation desire precision instrument approach
capabilities which allow for all weather operation capabilities.
•
Limited Fleet Mix: The current fleet mix at the Airport is skewed toward the
recreational end of based aircraft due to limited runway length and lack of an all weather
precision approach. While any based aircraft is better than none at all, the current fleet
mix of smaller aircraft does have a limiting effect in regard to growing Airport revenues
during a lean economy encumbered by high fuel prices. Corporate aircraft use more fuel
and airport services than smaller single engine recreational aircraft. As fuel prices climb,
recreational pilots tend to reduce their activities while business aviators find ways to
continue flying, by passing along increased expenses to their customers.
•
Environmental & Archaeological Issues: There are a number of wetland, forestation,
and archaeological issues that must be studied and resolved or “permitted” before
construction may begin on the runway, hangars, fuel farm, taxiways aprons and other
infrastructure developments. These are by no means insurmountable, but they do present
significant time sinks slowing overall progress.
•
Through the Fence Access Fees: The Airport currently has three “through-the-fence”
operators paying little or no access fees. These operators do not pose a financial threat to
the Airport, but they may be draining potential revenues from DRBA by not paying full
shares of what on-airport operators would pay.
•
Resistance to Airport Expansion: The Airport has faced resistance to expansion from
noise sensitive neighbors concerned about increased activities by larger aircraft, which
are perceived to be louder than the current types using the Airport. Although new aircraft
jet engine technology has improved on noise reductions and Stage 3 aircraft noise
compliance, there is still the negative perception of jet aircraft versus propeller aircraft.
5.3
Revenue Enhancement Opportunities
In consideration of the challenges previously discussed along with current activity levels
and infrastructure developments, there are a number of ways to increase net revenues and
improve long term viability of the Airport. Generally, such strategies can be understood as those
which either increase revenues or cut costs. In this section, revenue enhancement strategies that
focus on increasing revenues are presented. Elements of this strategy include the following:
•
New Replacement Runway: Delaware Airpark’s Airport Master Plan calls for the
development of a new 4,200-foot by 75-foot parallel runway and required Runway
Protection Zones to be constructed as FAA funding permits, (currently projected for
2012.) When the new runway is completed, the existing runway will be converted to a
parallel taxiway. In preparation for this development, DelDOT and DRBA are in the
process of acquiring approximately 150 acres of additional land in 16 parcels. In
addition, a program of selective tree removal beyond the western end of the runway
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(Runway 9) has been implemented. The immediate benefit has been a lifting of the
1,005-foot displaced threshold from that end of the Runway, which has extended the
current operational length of the runway to 3,582 feet for those landing from the western
end and 3,232 feet for those landing from the eastern end. This provides a significant
improvement in runway function and safety.
It must be considered that the displaced threshold limitations have directly influenced the
type and mix of aircraft currently based at the Airport. It is entirely possible that over
time, the current mix of aircraft types may in fact change to meet the expanded
operational capabilities of the newer, larger 4,200-foot by 75-foot parallel runway. This
includes the growing Very Light Jet (VLJ) market of efficient personal jet aircraft
capable of operating on runways of 4,200’ and less.
•
Hangar Development Options: DRBA can increase revenues through the development of
aircraft hangars. This is achieved directly via hangar rentals and land leases, and
indirectly via the various products and services (fuel and maintenance) used by based
aircraft. Currently, the Airport features 20 enclosed aircraft hangar storage units on the
Airport property at 100 percent occupancy. As of 8/2008, there is a waiting list
consisting of 32 aircraft. From standard criteria, it is assumed that all 32 of the aircraft
on the waiting list would be housed in T-Hangar units. Two names on the waiting list are
currently leasing tie-down spaces at the Airport. There are a total of 36 tie-down spots,
with 28 currently leased. The business plan examines two possible hangar development
scenarios – one where DRBA develops the hangars using low-cost development means.
Another method would be to have a private developer construct the hangars on a land
lease arrangement.
•
Attraction of Corporate Aviation: To improve overall revenues and become a center of
economic development in the area, Delaware Airpark will need to attract more corporate
aviation. When implemented at other airports, this has resulted not only in the attraction
of new businesses to the area but also in significant revenue enhancement for airport
sponsors. With increasing fuel costs dampening recreational flying activities, the
attraction of corporate aviation is even more important to stabilizing and improving the
Airport’s overall revenue stream. With 3,582 feet of runway length, the Airport is
currently capable of competing for small to medium corporate aircraft. The construction
of the new 4,200-foot runway will increase the Airport’s competitive position allowing
for the operation of light turbine powered aircraft.
Corporate aviation at Delaware Airpark need not consist of large business jets. Instead,
corporate aviation activity can include very light jets, large multi-engine propeller aircraft
such as the Beechcraft King Air, or even single engine aircraft such as the Cirrus aircraft
or the Pilatus aircraft. The larger aircraft would require conventional hangar space and
would use significant amounts of jet fuel. When fuel sales revenues, employment
benefits, and hangar lease aspects of the operation are included, there is a significant
potential revenue impact to be gained by attracting corporate aircraft to Delaware
Airpark.
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•
Addition of Jet A Fuel: Currently, the airport offers only 100LL Avgas. Jet A fuel was
once available on a prearranged basis but is no longer offered. Corporate turbine
powered aircraft (turboprop and turbojet) use significantly more Jet A per fueling at
higher margins than recreational pilots fueling with 100LL at lower margins. For
purposes of this analysis, margins were estimated at roughly 15 percent for 100 LL and
20 percent for Jet A. The addition of Jet A is essential to attracting both itinerant and
based corporate and business aviation, and will serve to add significantly to the revenue
stream of the Airport.
•
New Precision Approach: Facilities allowing pilots to safely conduct all-weather/daynight operations are vital to becoming a true business class airport. For this reason, it is
important to add a precision instrument approach for the 4,200-foot runway. This
approach would not have to be a ground-based Instrument Landing System (ILS).
Rather, a GPS-based approach that uses Wide Area Augmentation System (WAAS)
technology such as the LPV approach could be developed for the new runway. Although
this capability would not directly earn revenues for the Airport, it would provide an
important amenity to corporate aviation, making the airport more attractive for basing
purposes.
•
Additional/Specialty FBOs: Economic activity from specialty FBOs includes the
attraction of aircraft to the Airport, the employment of local residents, and the purchase
of supplies and materials both locally and from outside the area. In preparation for the
attraction of corporate aviation, an FBO that performs aircraft maintenance would be
needed at the Airport. Currently, Delaware State University employs an aircraft
mechanic to perform maintenance on their fleet, but that mechanic does not work on
other aircraft. To become a full service airport, aircraft maintenance must ultimately be
offered to the entire airport based and transient aircraft population. While this may
require a transition period with the University, some negotiations toward that end should
be initiated by DRBA.
•
Improved Terminal Services, Amenities, and Activities: As mentioned above, an FBO
that performs aircraft maintenance for the entire airport population is needed. Delaware
State University’s Airway Science Program employs an aircraft mechanic to work on
their fleet of 11 airplanes. Adding aircraft maintenance as a service offered at the Airport
for all aircraft (not just the Delaware State fleet) is an important amenity that would
contribute to Airport revenues.
Other minor money making activities may include fly-ins and pancake breakfasts or
barbecues, mini-air shows, and other community outreach programs that have the
potential to produce income while also generating some positive public relations for the
Airport. At other airports, portions of the facility are leased from time to time to support
car shows, RV exhibits, and other static display events. If corporate aviation is attracted
to the Airport, a rental car outlet would be a good addition to FBO services offered.
Minimal revenue was forecast from these sources.
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•
Improved Lease Agreements with Through-the-Fence Operators: As previously
discussed, the Airport currently has three “through-the-fence” operators paying little or
no access fees. It is recommended that a standardized agreement be drawn up and
implemented with each of these operators. Each of the businesses is operating on what
they may perceive as “grandfathered” rights from the previous owner. To ensure that any
future on-airport business is not subject to unfair competition, a rates and charges
agreement should be developed for each through-the-fence operator.
•
Rates & Charges Adjustments: A previous Cost Benefit Analysis indicated that Hangar
Rental fees at Delaware Airpark are below the market average. Rates could be increased
to reach market value, thereby increasing revenues to DRBA. Such an increase would
also narrow the pricing gap between new hangar prices and older hangar rents. One
method used at another airport involved the raising of rents by $50 per month each year
until vacancies began to appear. For Delaware Airpark, one approach may be to increase
rates at the existing hangars by $50 per month each year for two years. Rents of $280 per
month and $250 per month for existing hangars by the year 2011 would be close to
market values for the age and type of hangar facilities that currently exist. Hangar rental
rates for the new hangars are discussed in Section 6 of this report.
•
Non-Aviation Property Development: Currently, DelDOT and DRBA are attempting to
purchase Parcel #2B, known as the McGinnis property. This property is located on the
south side of the runway, west of the existing terminal area. The land is needed for storm
water drainage and some hangar and loop road development areas. Because the land is
zoned for Industrial uses, property that is not essential for aeronautical use could be used
for a business park and/or industrial development. While rents from such property are
speculative, it may be valuable to partner with industrial development interests in the
funding and construction of the loop road that would access the corporate hangar area.
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RECOMMENDED PLAN
T
HE RECOMMENDED BUSINESS PLAN FOCUSES ON THE transition of Delaware Airpark in its
role as a general aviation training airport to more of a business class general aviation
facility. This vision is supported by measurable economic trends and stated economic
development targets within the region. For purposes of this plan, the current approved Airport
Master Plan sets forth a series of improvements aimed at expanding the airfield to meet ARC BII design standards by the year 2012. This section presents the financial implications of each
development option for DRBA’s consideration.
The recommended plan of action from this report rests on four primary strategic
initiatives:
1)
Hangar Development: In the near term, DRBA can attract additional based aircraft to
the Airport through the construction of low-cost hangars. The business plan calls for the
immediate development of 20 T-hangars. Either DRBA can develop these hangars with a
low cost builder or they can lease land to a developer to construct low-cost hangars. The
low-cost aspect of the project is important in order to keep rental rates competitive with
other competing airports. Once the new runway is constructed, an additional 20
replacement T-hangars are needed when the existing older T-hangars are razed. Also, the
new runway length will support the development of three small-to-mid-size corporate
aviation hangars.
2)
Attraction of Corporate Aviation: Physical improvements to the Airport such as the
planned new runway/runway extension project and a strategic shift toward the attraction
of corporate aviation will bolster fuel sales revenues and on-airport employment.
Corporate and business aviation represent a large, lucrative segment of the general
aviation market. Although full-size business jet activity will still likely use the Civil Air
Terminal, Delaware Airpark can compete for the Very Light Jet and corporate multiengine propeller aircraft. To attract corporate aviation, the Airport needs to add Jet A
fuel service and improve its instrumental approach capabilities.
3)
Development of Non-Aeronautical Property: Acquisition and development of what is
called the “McGinnis” property (Parcel #2B) has the potential to add revenues to the
Airport operating budget. This property will serve a number of purposes including storm
water management, possible wetland mitigation, general aviation access, and potential
industrial development. Figure 6 shows the potential areas of non-aeronautical
development that would accompany the acquisition of this property. No revenues were
shown from this property within the five-year business planning timeframe. However,
business interests may partner with the DRBA in developing an access road to serve the
corporate aviation development located at the western end of the existing runway area.
4)
Rates & Charges Adjustments: It is anticipated that hangar rental rates can be increased
over the next two years to provide a higher revenue stream to DRBA, while at the same
time providing transition to new higher rates for new hangar facilities. In addition,
uniform or consistent agreements with through-the-fence operators are needed to ensure
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that all airport users are equitably sharing the costs associated with the operation of the
Airport.
Included in the following subsections are suggested means of improving the financial
performance of the Airport:
•
•
•
Revenue Enhancement Recommendations
Impacts on Revenues and Expenses
Summary of Business Plan Recommendations 6.1
Revenue Enhancement Recommendations
Revenue enhancement activities recommended for Delaware Airpark focus primarily on
the long term vision of developing Delaware Airpark into a business aviation airport serving
Central Delaware. This involves efforts to provide suitable facilities that will attract corporate
aviation including new runway construction with precision instrument approach, new hangar
development, and a new fuel farm with Jet A capability. Other recommendations that should
enhance revenues include new and/or improved terminal services and amenities, standardized
agreements with through-the-fence operations, an Airport branding project, the development of
Airport property for non-aviation uses, and adjustments to current rates and charges toward
market rates. The following sections describe in greater detail these revenue enhancement
recommendations.
Attraction of Corporate/Business Aviation
As the general aviation industry has matured, most airport owners, sponsors, and
operators throughout the country have recognized that corporate/business aviation provides a
higher source of revenue to airports than recreational general aviation. This is especially the case
given the rising costs of fuel, which business users can pass on to their customers as a cost of
doing business, while personal/recreational users cannot. Additional benefits of business
aviation include job creation and enhancement of Airport services and infrastructure.
While Delaware Airpark cannot compete with the runway length available at Dover Air
Force Base and the Civil Air Terminal, the construction of a new parallel Runway 9-27 at a
length of 4,200 feet will greatly assist the Airport in accommodating more business aviation
aircraft. Even so, there are some impediments for business use of the Civil Air Terminal
including a 72 hour prior permission policy, the required submittal of passenger manifests,
landing fees, and insurance requirements. Thus, Delaware Airpark can fill a niche business
market that includes users that desire unlimited airport access and availability, Jet A fuel, private
hangars, and precision GPS instrument approaches. Thus, it is recommended that:
DRBA should market corporate aviation for Delaware Airpark once the new,
longer runway has been completed.
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Marketing Program
In concert with the new Runway construction project, it will be time to identify and
allocate funding for a recruitment campaign to attract new business users and prospective hangar
tenants to the Airport. The recruitment campaign should be based on a new marketing plan for
the Airport which identifies target markets for aggressive marketing activities. It is not
necessary for the new marketing plan to start from scratch. The Delaware Economic
Development Office (DEDO) has research available providing an overview of Delaware’s
targeted industry clusters with specific emphasis for those segments gravitating to the Central
Delaware region. Using this research as the basis of an Airport marketing plan, DRBA can take
advantage of existing business lists by industry from DEDO and regional Chamber of Commerce
databases, to develop a list of companies to market for basing operations at Delaware Airpark.
Additionally, other corporate tenants could include those basing at other regional airports, new
aircraft owners, or companies that manage fractional ownership of business jets. Therefore, it is
recommended that:
DRBA should allocate funding for the development of a marketing plan,
and targeted recruitment strategy/activities for attracting new
corporate/business aviation activity to the Airport.
Generally speaking, marketing activities will not occur without funding. Thus, if
marketing of corporate aviation is going to occur, adequate resources will need to be dedicated to
this effort. Such an effort need not be expensive and could be accommodated for $10,000 or less
per year. It should begin once the runway expansion construction is underway.
Corporate Aviation Standards
In the transition to corporate aviation standards, aesthetics that surround corporate and
business aviation should be implemented at the Airport. This would include attention to details
enforcing contract and lease language for existing tenants. Language which requires tenants to
keep their premises clean and sanitary and in the best condition and repair needs to be enforced.
Development standards such as setback requirements, landscaping, and aviation versus nonaviation use of Airport property should all be considered in upgrading the image of the Airport.
With this in mind, it is recommended that:
Development standards, lease language, and property use should all be geared
toward upgrading the facility aesthetically and functionally to corporate
aviation standards.
Construction of New Parallel Runway 9-27
The lack of adequate runway length may be the single greatest impediment to airport
growth and overall fleet mix. To date, the airport has been limited to small single engine and
light twin engine propeller driven aircraft. These aircraft tend to be for recreational use rather
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than business use. As previously discussed, recreational operations tend to decline as fuel prices
climb, whereas business aviation operates more independently of fuel costs. Therefore, the
attraction of corporate aviation is vital to the long term viability of the Airport, and the
construction of a new, longer runway must be considered the single most essential element in
facilitating this corporate aviation growth.
The current approved Airport Master Plan sets forth a series of improvements that are
aimed at expanding the airfield to meet ARC B-II design standards. Revised funding schedules
indicate that this development is not likely before the year 2012. These standards primarily
require the construction of a new 4,200-foot runway, with increases to Runway Safety Areas and
runway/taxiway separation to accommodate the needs of critical aircraft such as the twin-engine
turboprop Beechcraft Super King Air and the new generation VLJ aircraft. Therefore, it is
recommended that:
The new Runway 9-27 should be developed as soon as funding permits.
It is understood that there is only so much that can be done in nurturing federal funding. This
component is so essential to the attainability of the Airport vision, it should be given immediate
priority at every step.
Construction of New Fuel Farm
In order to take advantage of additional itinerant activity associated with the effective
lengthening of Runway 9-27 (removal of the 1,005-foot displaced threshold on current Runway
9), the provision of Jet A fuel would increase potential revenues to DRBA. DRBA has allocated
$350,000 toward the construction of a new fuel farm which will add the availability of Jet A as
well as 100LL currently offered at the Airport. The addition of Jet A fuel will facilitate the
attraction and service of itinerant light and medium business class aircraft, which will
immediately assist servicing the debt of fuel farm construction, and ultimately assist in attracting
corporate aircraft to base at the Airport.
In the long term, DRBA should also consider the addition of a fuel truck at Delaware
Airpark for servicing turbine powered business aircraft. Whereas, recreational operators may
actually appreciate the convenience and savings of self-serve fueling, corporate flight crews are
typically much less likely to taxi to a self-serve pump and self-fuel, particularly if it would
require an additional power-up cycle on the engines. It certainly is not ideal for attracting and
retaining corporate operators accustomed to full service at other airports. Most business
operators prefer fueling truck capabilities that can accommodate their aircraft at their own hangar
apron. Fueling on the transient apron is also important for transient corporate and business
aircraft. A fuel truck would improve the ability to attract corporate and business aviation.
Therefore, it is recommended that:
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A fuel farm should be constructed in the near term and DRBA should
consider the acquisition of a fuel truck to dispense fuel.
Hangar Development Options
The development of hangars is important to an airport not just because of the revenue
generated from hangar rents and land leases, but also to create an airport population of based
aircraft that will contribute to the operational revenues in terms of fuel sales and the support of
aircraft maintenance and other airport services. Telephone surveys conducted May 20, 2008
revealed “no vacancies” for T-hangar space among the nine competing service area airports. As a
result, most airports have waiting lists of customers desiring hangar space. Delaware Airpark
alone has a waiting list of over 30 customers seeking competitively priced T-hangars.
Due to revenue considerations and current market demand, a strategic option
recommended in this business plan is to develop 20 new hangars immediately, while maintaining
the existing 20 T-hangars intact and operational in the short term. In this manner, the Airport
may capture as many new based aircraft as possible from the hangar waiting list, while retaining
its existing customer base. During the new runway construction, the 20 old hangars on the north
side of the current runway will need to be removed. However, the runway construction may not
occur until 2012. Thus, retention of those older hangars will produce revenues for DRBA
exceeding $40,000 per year. If rents for these units are increased, revenues will also increase
accordingly. Thus, it is recommended that:
Twenty new low-cost T-hangars should be constructed on the south side of the
runway in the near term.
To preserve as much cash flow as possible into the future, it is recommended that:
The existing 20 hangar units should be retained until runway construction
forces their demolition.
It is anticipated that when federal funds become available as part of the runway
construction project, a portion of those funds will be allocated to the hangar “relocation” of the
older 20 units. In this regard, it is believed that the FAA will fund development of a new site on
the south side of the runway adjacent to the first set of 20 T-hangars. Although funding will not
include the actual replacement of hangars, it will include the access taxiways, concrete pads,
utility infrastructure, and roadway access. This funding assistance will reduce the sponsor
portion of the investment such that low-cost T-hangars can be financially feasible to construct
with DRBA funding. The feasibility analysis is shown in a subsequent section. This plan allows
for a low cost alternative permitting DRBA ownership of the 20 newest hangars at competitive
market rental rates. Therefore, it is recommended that:
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Twenty replacement T-hangars should be constructed under DRBA ownership
and partial FAA funding on the south side of the runway to replace the
demolished hangars on the north side.
Finally, it is recommended that up to three conventional hangars be constructed for
corporate aviation during the new runway construction phase. It is anticipated that larger
hangars will be needed for the anticipated influx of corporate aviation activity at Delaware
Airpark. To be conservative, only three hangars are recommended by this business plan, but
actual demand should be used to determine the total number and type of conventional hangars.
Thus, it is recommended that:
Three low-cost conventional hangars should be constructed for corporate
and business aviation use.
These hangars (anticipated to be 60 feet by 60 feet) could be constructed either by DRBA or by
private enterprise as long as the costs are contained. For purposes of this business plan, it was
assumed that DRBA could use private contractors to construct the buildings in a turnkey
operation where DRBA would own the buildings once completed.
Under the private developer options, there should be a reversion clause in every lease that
reverts ownership of the hangars to DRBA within a negotiated time period – usually 25 years.
This effectively creates equity for DRBA that would roughly offset the equity that would be
gained through the DRBA ownership and debt service financing option. Thus, the true
comparison between private versus public hangar development methods is based on the
difference between lease margins and principal payments on one side (DRBA developed
hangars) and land lease payments and accrued equity transfers each year on the other (private
developer option). As such, it is recommended that:
Private hangars should revert to DRBA ownership/control after 25 years.
With ownership reverting to DRBA after 25 years (or negotiated time period), market rents could
be charged and accrue to DRBA for the remaining life of the buildings – perhaps as long as 40
years.
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T-Hangar Location
In our review of the current Terminal Area Plan and proposed landside developments,
several issues were identified that will influence the most advantageous location for new Thangar construction. Under the current T-hangar development concept in the Airport Master
Plan shown in Figure 4, the proposed 50 new T-hangar units (for the 20-year planning horizon)
would be located at the western end of the present taxiway and runway. This layout unavoidably
impacts an active archaeological investigation site and possibly a wetland in the area. It is
possible to build around the perimeter of the archaeological and wetland sites, with the full
knowledge that within one year the archaeological investigation will conclude and at some future
point, the wetland mitigation will occur, which will make the protected property available for
development.
While private pilots may access the terminal area via the current taxiway from that
location, they would have no direct connection to the terminal area by road. To access the
terminal area they would have to drive back onto State Route 42 and loop onto Durham Lane, the
primary Airport access road. This layout can be made to work, but it is not the ideal
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design/scenario. To better utilize resources and to create a more user-friendly layout, it is
recommended that:
The new T-hangar units should be located closer to the terminal area.
This new location is shown in Figure 5. There are several advantages associated with this
layout:
•
Archaeological Site: Issues regarding the active archaeological investigation may be
completely avoided in the near term, allowing for the expedient completion of the
investigation with no disturbance from construction and usage.
•
Wetland Disturbance: It is anticipated that there will be fewer wetland area issues
involved in the construction of the hangars and road on the terminal end as opposed to the
western end.
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•
Terminal Services: Location of the T-hangars near the terminal building will facilitate
pilot/passenger use of restroom facilities, flight planning services, lounge area, etc. Since
corporate users have most of these facilities and services within their hangars, more
remote location for them is actually better than the current configuration.
•
Access Road: A new and shorter access road may be constructed from the Terminal
Area parking lot on existing Airport property. This road may be extended as development
requires.
•
Access Security: Access may be gained from the current Terminal Area parking lot via
an electronic/mechanical security gate thereby permitting Airport Management increased
security capabilities, as well as the ability to deny access to tenants who may be behind in
their rent payments, etc. The fact that all access and egress must pass near the terminal
facilitates customer interactions.
•
Convenience: By improving T-hangar proximity to the Terminal Area, taxi distance is
shortened for operators requiring fuel at the self-serve pump on the Terminal Ramp, as
well as giving tenants the impression that they are valued and welcome members of the
Airport community simply by improved proximity to the Terminal Area. These are minor
considerations that represent added convenience for Airport tenants.
•
Future Tie-Down Area: There will be ample space for up to 30 aircraft tie-downs west
of the new T-hangar area. Although this tie-down area may encounter certain wetland
issues, its potential impact will be far less than the impacts that would be imposed by
hangar development. It is possible to arrange tie-downs around the perimeter of the
wetland area without infringing directly into that area.
•
Corporate Hangar Development: As mentioned, considerable space remains on the
western end for development of corporate hangars as needs demand. Since this type of
hangar is in less immediate demand than T-hangars, it is anticipated that the
archaeological investigation will be concluded before construction would need to begin.
Financial Comparisons – First Set of 20 T-Hangar Units
For this plan, two primary options were considered for the immediate development of 20
T-hangars:
•
•
Private Development of First 20 New T-Hangars with DRBA Land Lease
Exclusive DRBA Development of First 20 New T-Hangars
These options were followed by the subsequent recommendation of DRBA exclusively
developing 20 replacement T-hangars and three conventional hangars concurrent with the
construction of the new runway. Each of these options is described in the following sections:
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Private Development of Hangars
The first option would be to place the development of 20 new hangars nearest the
terminal building out for bid and let the private sector lease land and develop the hangars. This
option would provide land lease revenues to DRBA and an average accrual of 4 percent equity
per year (over 25 years) in the structures. The difference here is whether DRBA is willing to let
a private entity share the development and ownership or would simply prefer to use their own
funds in developing the hangars. Either way, DRBA accrues full ownership of the structures
over a period of 25 years.
The current best case scenario for private development suggests an estimated unit cost of
$47,000 which also includes all site prep, materials and labor. Multiplied by 20 units this totals
$940,000. The financing of $940,000 in hangar development over a 25-year period at 5 percent
interest would result in a need to repay $65,942 per year or $5,495 per month. In order to repay
the debt for T-hangars, DRBA land lease fees of $11,400 per year, and retain a 10 percent net
operating profit, rents of $350 per month per T-hangar would need to be charged. Table 10
documents the cost assumptions and results of this financial analysis.
These costs are also slightly higher than average hangar fees in the region, but are much
closer to supportable rates. If these rental rates are employed, Delaware Airpark will have a less
difficult time securing occupancy by aircraft owners currently on the hangar waiting list. There
is also the benefit of justifying the increases in rent necessary at the existing hangars. The net
result of this approach results in a projected gain of 15 based aircraft by 2013. This option
provides DRBA with only slightly less than total control over their Airport investment. It
features an equivalent return, (resulting in a much higher actual return on investment.) It has the
same benefits of equity building toward 100 percent ownership by DRBA over a 25 year period.
Plus, it provides the added advantage of conserving DRBA capital for investment in other
projects in the near term.
The RFP process for hangar development should require estimates of the total cost of
development and proposed rental rates. Typically, these leases are structured to run from as low
as 20 years to as high as 32.5 years. Most are in the 25-year range. If a 25-year lease is given to
private developers with a reversion clause (ownership reverts to DRBA after that period,) there
will an immediate boost in revenues with no direct cash outlay required from DRBA, since the
land lease will be paying positive cash flows to DRBA from the start of the lease.
DRBA Development of T-Hangars
If DRBA develops hangars with the notion of investing in these facilities and receiving
some significant return on investment, it may be difficult to achieve unless a low cost
construction solution can be secured. The current best case scenario for DRBA would include a
potential unit cost of $60,000 for site prep, materials, and labor. (Since these costs have not been
bid, they are simply estimates for comparison purposes – actual costs could differ substantially,
depending upon the specifications of the bid). Multiplied by 20 units this totals $1.2 million.
The potential financing (for comparison purposes) of $1.2 million in hangar development over a
_____________________________________________________________________________________________
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25-year period at 5 percent interest would result in a need to repay $84,181 per year or $7,015
per month. Rental rates needed to repay the debt for T-hangars, by individual unit (including
$50 per hangar per month in equivalent Land Lease recovery charges that would otherwise be
derived from private development) would cost an average of $400 per month per T-hangar.
Table 10 presents the results of this financial comparison.
These rental rates are somewhat higher than average hangar fees in the region and may
restrict demand to certain extent. The price elasticity of demand is not known for hangar rentals
in central Delaware. However, basic economic theory supports the notion that demand decreases
as prices escalate. Thus, it is difficult to pinpoint precisely where the ideal balance of price and
demand may be, but it is safe to assume there are more people willing to pay $350 per month for
a T-hangar rental than those willing to pay $400 per month for the same facility. A loss of even
one based aircraft (on an airport of 46 based aircraft) would impact margins on rental revenues,
fuel sales, and future support of an aircraft maintenance provider.
While, this option does provide DRBA with the greatest amount of control over their
Airport investment, it has a limited return with the added possibility of restricting or reducing
future revenues. As shown in Table 10, the total average annual return to DRBA is the same
under both methods, with the exception that DRBA would have to charge an additional $50 per
month in rent than a private developer. This table indicates that if DRBA could construct
hangars that were less costly than those of a private developer, a greater return on investment
could be realized.
Table 10 – First Set of 20 T-Hangars Cost Assumptions
DRBA
Private Developer
$60,000
$47,000
$1,200,000
$940,000
Land Lease Per Year
$0
$11,400
Monthly Rents/Unit
$400
$350
Average Equity Return/Year
$49,000
$37,600
Total Average Annual Return
$49,000
$49,000
Unit Cost*
Project Cost (20 T-hangars)
* Hypothetical cost comparison
For the first set of T-hangars (20 units) it is recommended that:
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DRBA should seek quality low-cost hangar development for the first
set of 20 T-hangars to be constructed allowing for regional price
competitiveness, and the opportunity to secure additional based
aircraft currently on the hangar waiting list.
Given the financial comparison presented in Table 10, DRBA should strongly consider
partnering with a private entity on the development of the first 20 T-hangars in order to
maximize return on investment and conserve DRBA capital for the construction of the second set
of 20 T-hangars, the cost of which will be partially offset by FAA funds as part of the runway
construction project. If DRBA uses private enterprise to develop hangars, leases should be
structured to include reversion clauses for DRBA ownership of the buildings after a set period of
time.
Construction of Three New Corporate Hangars
It is anticipated that the new longer runway, precision approach, availability of Jet A fuel,
other ancillary developments and airport marketing will result in the basing of two multi-engine
propeller aircraft such as the Beechcraft King Air and one VLJ by 2013. To accommodate this
demand, the construction of three new corporate hangars (60 feet by 60 feet each) will be needed
sometime in 2012. Because of the higher rates of return on corporate aviation facilities, DRBA
may be in the best position to use its capital to construct these hangars – particularly if low-cost
construction methods can be employed. If these cannot be developed with DRBA capital, then
land leases to private developers can be sought.
Construction of Second Group of 20 T-Hangars
When the construction of the new runway takes place, the existing hangars on the north
side must be demolished. At that time, a set of 20 replacement hangars will be constructed on
the south side of the runway, adjacent to the new 20-unit T-hangars already in place.
Discussions with FAA haven indicated that funding will be available to provide the site
preparation for this action. This funding will include taxiways, concrete pads, and utility
infrastructure, thereby reducing the cost to the builder. If DRBA undertakes this development,
costs of construction can be cut in half, thereby making the project significantly more attractive
from a return-on-investment standpoint.
For this business plan, it was assumed that DRBA would construct the hangars using
low-cost methods. It was assumed that DRBA could then charge market rents. In this regard, it
was estimated that as much as 100 percent return on investment over the 25-year period could be
earned from the T-hangar development. Table 12, presented later includes the revenues
associated with this hangar development.
Adjustment of Hangar Rents
Hangar rent price escalations at Delaware Airpark have lagged behind the rest of the
service area and the Consumer Price Index. While this is a good policy to attract market share, it
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should be noted that there is a virtual “area wide waiting list” for available hangar space.
Delaware Airpark is near the bottom of the price scale, indicating that the Airport is long
overdue for an increase in T-hangar rental fees. Additionally, the recent cost escalations for all
services brought about by energy cost inflation should not be ignored. Most airport tenants are
not happy with price increases, but they do understand that costs increase over time. DRBA
should keep pace with the rise in prices by increasing rents periodically. Specifically, it is
recommended that:
Monthly hangar rental prices on the existing 20 units should be
increased by $50, with another increase of $50 in one year to
better mirror competitive service area market rates.
Monthly hangar rental prices at the existing 20 units are currently $150 and $180. These would
be increased to $200 and $230. After one year, a second increase would place the rents at $250
and $280. It is recommended that the prices remain at those rates until the hangars are
demolished (roughly 2012).
Development of Non-Aviation Airport Land
While Right of Way access via the McGinnis property has been secured for the
development of the new loop access road on the west end of the current taxiway, there is a plan
to purchase the entire parcel. This land can be used for aviation development, access to hangars,
storm water management, wetland mitigation, and non-aviation development. Figure 6 shows
the location of the proposed non-aviation development. This property could be used for
compatible purposes such as industrial or commercial business use. While it may produce
revenues in the future through leases to DRBA, those revenues were not included in this business
plan. Rather, the most significant assistance within the 5 year planning period would be the
partnering on loop road access to the property. Whether this occurs from a partnership
arrangement with economic development interests in Kent County or if DRBA works some
arrangement for FAA funding of the loop road, it will be needed by 2013. Non-aviation use of
airport land could be a significant revenue source in the post-2013 period. Therefore, it is
recommended that:
DRBA should consider the development of non-aviation airport land use on
property acquired as part of Parcel #2B (McGinnis Property).
Through-the-Fence Operator Agreements
At present, the Airport currently has three “through-the-fence” operators paying little or no
access fees.
•
Phill-Air pays $80 a month on a previously existing agreement. A new agreement was
submitted by DRBA and heavily edited by Phill-Air, but remains unexecuted at the date
of this report.
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•
•
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Towery Aircraft Service pays $110 a month on a pre-DRBA agreement with the previous
Airport owner, and has had no updated agreement presented to them by DRBA.
Gilbert-O’Donnell apparently pays nothing for limited access from their hangar
southwest of the terminal.
A reasonable schedule of rates and functional lease agreements must be established for these
existing through-the-fence operations. Therefore, it is recommended that:
A standardized “through-the-fence” agreement needs to be developed and
executed for the three operators at Delaware Airpark.
No other through-the-fence agreements should be offered at Delaware Airpark. Once these
grandfathered operators either retire or go out of business, the agreements should not be renewed
with other businesses desiring to use their facilities.
New or Improved Terminal Services, Amenities, and Activities
If Delaware Airpark is to successfully court business and corporate aviation, DRBA will
need to focus not only on the development of the facility, but on the amenities and services
offered. Many times, corporate pilots have the authority to choose which airports they will use
in a particular metropolitan area. If an airport is known for its services and facilities, it will
attract this discretionary use. In preparation for this, the following recommendations can be
made concerning aircraft maintenance and the terminal services.
Aircraft Maintenance
Delaware State currently maintains a fleet of 11 trainer aircraft which account for
approximately two-thirds of all operations at the Airport. These aircraft accumulate hours and
require maintenance on a more regular basis than other based aircraft. As a result, the University
currently has complete dominion over the maintenance hangar on the east end of the terminal.
This facility is staffed by one maintenance technician solely dedicated to maintaining the
University’s fleet of aircraft. By all accounts, there is no room in his schedule for offering
services to additional “non-University” aircraft. Therefore, the non-University based aircraft
population have no access to aircraft maintenance at the Airport.
Summit Airport has kept a large based aircraft population, in part because of the
significant aircraft maintenance activity available there. At Delaware Airpark, some type of
maintenance service should be provided to based aircraft owners to capture their business and to
attract other business aviation interests that expect a full service FBO at their airport. This
situation presents a significant hurdle in regard to attracting a quality FBO, whose revenues are
significantly based upon fuel sales and the ability to offer aircraft maintenance. Either the
University’s activities need to grow to permit more maintenance of other aircraft, or, the Airport
must grow to support two separate maintenance facilities. It is therefore recommended that:
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Ultimately, one maintenance FBO should be based at the Airport,
serving the entire based and itinerant aircraft population.
DRBA should initiate discussions with Delaware State University regarding the maintenance
arrangement at Delaware Airpark, with the intent to resolve what could become competing
interests if not decided in the near term.
Terminal Building
The current terminal building was constructed to include amenities associated with
corporate and business aviation; it could serve to attract this segment of the aviation market. The
terminal building currently features a spacious lobby, conference room, pilot’s lounge, restrooms
and operations office that may be readily transitioned to permit operation by a quality FBO.
Other services offered could include; food and catering including high-end carry-out food (ribs,
steaks, etc.) cable TV, and a satellite car rental or some type of courtesy car availability. Since
pilots make decisions where to land, FBOs have learned to market their amenities and services to
these people. In order to promote corporate aviation and business use of the Airport, it is
important to have convenient ground transportation available on the premises. Even the
availability of a courtesy car with after-hours access can be a means of attracting corporate and
business aviation activity. Therefore, it is recommended that:
Once the runway is extended, DRBA should consider the provision of a
courtesy car or van to facilitate after-hours ground transportation.
While certain rental car agencies will deliver cars during business hours, after hours provision of
ground transportation is an important amenity needed for business aviation.
6.2
Impact on Revenues/Expenses
Quantifying the levels of additional potential revenue that would result from
implementing the strategies listed above is highly subjective. One reasonable method is where
the assumptions for each strategy are stated, along with the resulting impact. Then, if the
assumptions are not met, deviations from the predicted revenues can be expected. It is believed
that changes in revenues to DRBA would come primarily from increased airport development
and aviation activity.
Changes in Aviation Activity
The first step in determining the impacts of the revenue enhancement strategies presented
in the previous sections of this business plan is to predict the change in aviation demand that
would occur if each strategy were implemented. Table 11 presents a listing of the potential
demand changes along with the assumptions used in estimating demand changes.
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Table 11 - Potential Demand Changes by Year 2013
Current Activity
Operations
Based Aircraft
36,000
46
Demand Change
Assumption
Lengthen Runway
Will help in the attraction of business aviation.
0%
0
Attraction of Business
Aviation
Derived from marketing business aviation
interests and attracting business aviation users
to the airport.
6%
3
Specialty FBO/More
Services
Maintenance
population.
Airport
0%
0
Precision Approach
Supplements the attraction of business aviation
(activity included in Attraction of Business
Aviation).
0%
0
Terminal services
Minor impacts to demand
0%
0
Hangar Development
20 new T-hangar units within a 2 year period,
20 replacement T-hangars by 2012, along with
3 corporate hangars in 2013.
10%
15
Jet A Fuel Farm
This will also help in the attraction of business
aviation.
0%
0
Rates and Charges
Examine potential revenues from changes to
rates and charges.
0%
0
16%
18
41,760
64
Additional Potential Growth
Total Potential Activity
FBO
for
entire
The key strategic initiative for DRBA is the new runway and the development of four
10-unit T-hangars (estimated revenues to begin in 2010 for 20 T-hangars, and the other 20 Thangars will be built once the current T-hangars are torn down at the completion of the new
runway in 2012), three 60-foot by 60-foot conventional hangars, and a new fuel farm. These
developments, along with the other enhancement actions discussed in previous sections, will
effectively increase activity at the Airport. In this business plan, these strategies are assumed to
create sufficient interests to attract two multi-engine turboprops and one VLJ-type aircraft along
with 15 other based aircraft tenants to occupy the T-hangar units. Without these activities,
revenue growth potential at the Airport will be limited. The current hangar rates on the north
side of the runway will be raised by $50 per year for the next two years. Then once the new
runway is completed in 2012 these hangars will be demolished and replacement hangars will be
built on the south side of the runway. Table 12 presents a listing of how these potential demand
increases could impact the revenue picture for Delaware Airpark, if the assumptions for this
scenario are met.
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Table 12 - Potential Revenue Pro Forma: All Revenue Enhancement Strategies
Revenue Category
Leases
Aviation Fuel:
100 LL
Jet A
2008
2009
2010
2011
2012
2013
$58,793 $70,793
$94,193
$94,193
$113,393
$178,193
$133,303 $143,967
$169,881
$183,471
$198,149
$214,001
$0 $150,000
$150,000
$150,000
$150,000
$618,000
$364,760
$414,074
$427,664
$461,542
$1,010,194
Total Revenue
$192,096 Impact on Expenses:
For this analysis, it is reasonable to assume that the revenue enhancement strategies will
impact/increase some of the Airport’s expenses. The fuel expenses are expected to increase at the
Airport, however, it is assumed that DRBA will still maintain a 15 percent margin for 100 LL,
and have a 20 percent margin on Jet A fuel. Other operating expenses that will be impacted by
the Recommended Plan include:
•
•
•
•
•
Fuel Farm Starting in 2009 and Lasting 10 Years (Debt Service Assumed)
Two 10 Unit T-Hangars Starting in 2012 and Lasting 25 Years (Debt Service Assumed)
Three Conventional Hangars Starting in 2013 and Lasting 25 Years (Debt Service
Assumed)
Marketing Program Starting in 2011
Debt Service Interest on Capital Costs
Table 13 - Potential Impacts to Expenses from All Revenue Enhancement Strategies
EXPENSE CATEGORY
2008
2009
2010
2011
2012
2013
Maintenance
$120,321
$125,134
$130,140
$135,345
$140,759
$146,389
Operations
$54,877
$57,072
$59,355
$61,729
$64,198
$66,766
100 LL Fuel Costs
$115,915
$125,189
$147,722
$159,540
$172,304
$186,088
Jet A Fuel Costs
$0
$125,000
$125,000
$125,000
$125,000
$515,000
Debt Service Interest
$0
$16,871
$15,455
$13,967
$42,122
$74,615
Marketing Program
$0
$0
$0
$10,000
$10,000
$10,000
Benefits
$4,515
$4,696
$4,884
$5,079
$5,282
$5,494
Administration Allocation
$48,166
$50,093
$52,097
$54,180
$56,348
$58,602
Total Expenses
$343,795
$504,055
$534,652
$554,841
$616,012
$1,062,953
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Comparison of Expenses & Revenues
When the forecast of potential revenue increases resulting from all revenue enhancement
strategies is compared to the forecast of operating expenses for Delaware Airpark, a forecast of
future net operating costs for the Airport can be considered. Table 14 presents this comparison:
Table 14 - Recommended Plan Operating Revenue & Expense Comparison
Year
Forecast Operating
Revenues
Forecast Operating
Expenses
Forecast Net
Operating Costs
2008
$192,100
$343,800
($151,700)
2009
$364,800
$504,100
($139,300)
2010
$414,100
$534,700
($120,600)
2011
$427,700
$554,800
($137,100)
2012
$461,500
$616,000
($154,500)
2013
$1,010,200
$1,063,000
($52,800)
Comparison of the forecasted operating expenses and forecasted levels of operating
revenues indicates an operating deficit through all five years of the forecast. Implementation of
the business plan strategies anticipates an operational deficit of $52,800 in 2013 which is
$127,400 less than the baseline forecast of (-$180,200). The Recommended Plan includes an
additional $238,000 in net revenues over the Baseline Scenario estimates. Additional revenues
could be earned if strategies more aggressive than those specifically discussed in this business
plan are pursued.
6.3
Summary of Business Plan Recommendations
A number of recommendations have been made as a part of this business plan study, all
with the ultimate goal of increasing net revenues at Delaware Airpark. Many of these strategies
have additional benefits to the Kent County area, such as increasing economic development and
employment in the local community. Specific recommendations by timeframe are as follows:
Immediate
●
●
1st Priority – A fuel farm should be constructed in the near term and DRBA
should consider the acquisition of a fuel truck to dispense fuel: The new fuel
farm will add the availability of Jet A fuel as well as 100LL that is currently
offered at the Airport. The addition of Jet A fuel will help attract business class
aircraft to the Airport.
2nd Priority – Monthly hangar rental prices on the existing 20 units should be
increased by $50, with another increase of $50 in one year to better mirror
competitive service area market rates: Once hangar rates are raised, they should
mirror the CPI.
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●
A standardized “through-the-fence” agreement needs to be developed and
executed for the three operators at Delaware Airpark.
rd
3 Priority – The new Runway 9-27 should be developed as soon as funding
permits: DRBA should construct a new parallel runway as soon as funding
permits to a usable length of 4,200 feet to enable larger business aircraft to use the
Airport.
2009
●
1st Priority – Twenty new low-cost T-hangars should be constructed on the
south side of the runway in the near term: DRBA should seek quality low-cost
hangar development for the first set of 20 T-hangars to be constructed allowing
for regional price competitiveness, and the opportunity to secure additional based
aircraft currently on the hangar waiting list.
The new T-hangar units should be located closer to the terminal area.
Private hangars should revert to DRBA ownership/control after 25 years.
●
1st Priority – T-Hangar Development/Demolition: The existing 20 hangar units
should be retained until runway construction forces their demolition.
Twenty replacement T-hangars should be constructed under DRBA
ownership and partial FAA funding on the south side of the runway to
replace the demolished hangars on the north side.
●
1st Priority – Three low-cost conventional hangars should be constructed for
corporate and business aviation use: DRBA should develop three conventional
hangar geared toward corporate aviation.
2011
2012
2008-2013
●
1st Priority - Attract Business Aviation: DRBA should market corporate aviation
for Delaware Airpark once the new, longer runway has been completed.
DRBA should allocate funding for the development of a marketing plan
(2011), and targeted recruitment strategy/activities for attracting new
corporate/business aviation activity to the Airport.
Other Items
●
Ultimately, one maintenance FBO should be based at the Airport, serving the
entire based and itinerant aircraft population: DRBA should consider
modifying their maintenance structure to have one maintenance operation at the
Airport.
●
Precision Approach: In preparation for corporate aviation activity, the Airport
should work toward an all-weather operation capability by including a precision
instrument approach.
●
Airport Amenities: Once the runway is extended, DRBA should consider the
provision of a courtesy car or van to facilitate after-hours ground transportation
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Long Term
●
August, 2008
DRBA should consider the development of non-aviation airport land use on
property acquired as part of Parcel #2B (McGinnis Property): DRBA should
consider developing aviation and non-aviation land for revenue generation
purposes.
Development standards, lease language, and property use should all be
geared toward upgrading the facility aesthetically and functionally to
corporate aviation standards.
Timetable and Trigger Points
Table 15 presents a timetable and listing of trigger points for implementation of the
recommended plan, grouped by type of action (administrative, marketing, etc.).
Table 15 - Action Plan Trigger Points
Action
Description
Trigger Point
Timeframe
Consolidate Delaware State University
maintenance and FBO maintenance
Once business
aircraft are
attracted to the
airport
Post-2013
New Parallel Runway
A new parallel runway with a usable length of
4,200 feet
As soon as
funding becomes
available
2012
Development of NonAviation Airport Land
Engage local commercial real estate leaders and
chamber officials to identify opportunities for
commercial/industrial development on/near the
Airport
As soon as
Post-2013
demand develops.
Precision Approach
All-weather operational capability in support of
business aviation
During the
construction of
the new runway
2012
Two 10-unit T-hangars
To house current tie-down users and users on the
waiting list
Immediate
2009
Two 10-unit T-hangars
To house the 20 aircraft in the hangars that are
going to be torn down
Completion of the 2012
parallel runway
Three Conventional
Hangars
Three 5,000 square foot conventional hangars to
house business aviation aircraft
Completion of the 2013
parallel runway
Airport Services
Maintenance
Airport Development
Aircraft Hangars
Marketing
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Table 15 - Action Plan Trigger Points
Action
Description
Trigger Point
Timeframe
Market Business
Aviation
Begin marketing of business aviation once the
new parallel runway construction begins
As soon as the
runway
construction
begins
2011 - 2013
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Appendix A:
Lease Summaries
Appendix A - Summary of Delaware Airpark Leases
Lessee / Tenant
Description
Physical Facilities
Amount
Additional Terms
Term Begin/End
Length
Date
Renewal Options
6 T-Hangar Leases
Each are a 300 square $150 per month
foot T-hangar
Tenants must have combined
Monthly
single limit insurance of at least
$1,000,000
Month to month automatic
renewal. 30 days written
termination notice required.
9 T-Hangar Leases
Each are a 300 square $180 per month
foot T-hangar
Tenants must have combined
Monthly
single limit insurance of at least
$1,000,000
Month to month automatic
renewal. 30 days written
termination notice required.
Earl D. Waller
300 square foot Thangar
$160 per month
Tenant must have combined
Monthly
single limit insurance of at least
$1,000,000
Month to month automatic
renewal. 30 days written
termination notice required.
Holden Dodge Inc
300 square foot Thangar
$360 per month
Tenant must have combined
Monthly
single limit insurance of at least
$1,000,000
Month to month automatic
renewal. 30 days written
termination notice required.
Dennis Ballard
300 square foot Thangar
$1,080 per month
Tenant must have combined
Monthly
single limit insurance of at least
$1,000,000
Month to month automatic
renewal. 30 days written
termination notice required.
15 Tie-down leases
300 square foot Tiedown
$60 per month
Tenants must have combined
Monthly
single limit insurance of at least
$1,000,000
Month to month automatic
renewal. 30 days written
termination notice required.
Lessee / Tenant
Description
Phill-Air Inc
Physical Facilities
Through the fence
operation
Amount
Additional Terms
Term Begin/End
Length
Date
Renewal Options
$80 per month
No insurance required
Monthly
Month to month automatic
renewal. 30 days written
termination notice required.
$110.50 per month
No insurance required
5 years
9/01/2005
8/01/2010
20 years
01/01/2006 None
12/31/2026
75’ x 150’ taxiway
access
Daniel Towery
Through the fence
operation
CPI increases at each renewal
term
75’ x 250’ taxiway
access
Delaware State
University
61,118 square feet
30 days written termination
notice required.
$5,509.29 per month land
rent
No insurance required
Building rent increases by CPI
every 4th year with fair market 4 years
$574 per month building rent value (FMV) adjustments every
7th year
01/01/2006
12/31/2010
Frank Minnick
400 square foot Thangar
$200 per month
Tenant must have combined
Monthly
single limit insurance of at least
$1,000,000
30 days written termination
notice required.
10 Tie-down leases
100 square feet
$40 per month
Tenant must have combined
Monthly
single limit insurance of at least
$1,000,000
Month to month automatic
renewal. 30 days written
termination notice required.
2 Tie-down leases
100 square feet
$100 per month
Tenant must have combined
Monthly
single limit insurance of at least
$1,000,000
Month to month automatic
renewal. 30 days written
termination notice required.